Tax exemption for three years

This major announcement included exemption of income tax for startups for 3 years. The announcement focused on providing growth and retainment of capital. This would apply if there is to non-distribution of dividend by the startup. This will also add to funds for VCs when their capital gains will not be subject to tax.  

A Startup India Hub for collaboration 

This hub will be one stop for contacting players in the startup space, enable function with the central and state government, angel investors, banks, domestic and international VCs, legal partners, universities and R&D institutions. The hub will also offer mentorship to enhance knowledge of new players and help them in getting hold of finances.

Norms will be relaxed for public procurement of startups

The norm of qualifying the criteria of "prior experience/ turnover" will no more be applicable for startups in the manufacturing space if the ventures have own manufacturing facility in India and own everything that the project requires.

Quicker exits for startups

Modi mentioned that his government is working on creating a simpler and faster policy for startup exits. As per the recent Insolvency and Bankruptcy Bill 2015 startups can also wind up business in 90 days which in turn will also work in accordance of limited liability concept.

Atal Innovation Mission 

With a view to give impetus to unique ideas, innovation and young budding talent, the Atal Innovation Mission will set up sector specific incubators and 500 'Tinkering Labs' to encourage entrepreneurship, offer pre-incubation training and also seed funding to rapidly growing ventures. Professionals will be honored with awards for their innovation and ultra-low cost solutions.

Innovative Programs for Students

The Action Plan also had something in store for the school kids. The PM announced that this program will be aimed 10 lakh innovations from 5 lakh schools. The top 100 will qualify for Grand Challenge program- NIDHI (National Initiative for Developing and Harnessing Innovations) at Rashtrapati Bhavan where 20 best will take cash prizes home.

Grand Challenge for Incubators

On the basis of pre-defined Key Performance Indicators (KPIs) to perform well globally, ten best incubators will be chosen by the government and will be awarded 10 Cr each for infrastructure ramp up.

Read More: 5 Innovative Indian Startups To Look Forward To

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